Minnesota soybean farmers remain frustrated with Brazil
by Erin Galbally, Minnesota Public Radio
November 11, 2003

Ron Jacobson farms 250 acres of soybeans in south-central Minnesota. He says Brazilian farmers who illegally grow GMO soybeans have an unfair market advantage. That's because they don't have to pay the costly technology fee imposed on U.S. producers. (MPR Photo/Erin Galbally)

This year for the first time Brazil will export more soybeans than the United States. The country's maintained a longstanding ban on genetically modified soybeans. But industry experts say as much as a quarter of Brazil's crop is produced from illegal GMO seed. The situation has caused frustration among American producers.

Wells, Minn. —
Farmer Ron Jacobson stands at the edge of one of his fields in south-central Minnesota. He takes in acres filled with tawny stalks of drying soybeans. Jacobson's entire crop is produced from genetically engineered seed, designed to tolerate a popular herbicide known as Round Up.

Jacobson leans down and picks a stalk. He says the genetic modification fools the plant.

The overwhelming majority of U.S. soybean growers are like Jacobson. They sow their fields with Round Up Ready seeds. It's not cheap. For each acre of soybeans, farmers dole out what's referred to as a technology fee. It's paid to Monsanto, the company that developed the herbicide. The fee started out at $5 an acre, and in recent years it's nearly doubled.

Ron Jacobson says he doesn't mind paying the fee, but it irks him that his biggest competitors don't have to. That's because they're in Brazil. GMO soybeans are illegal there. Even so experts estimate more than 20 percent of Brazil's enormous soybean crop comes from genetically engineered seed. The hazy legal situation has made it nearly impossible for Monsanto to collect.

"Ten to 15 dollars an acre is a profit margin for a lot of us," he explains.

U.S. farmers like Jacobson and companies like Monsanto might get their way in coming years.

Recently, the Brazilian government temporarily lifted its ban on GMOs. Under the decree Round Up Ready soybeans can be planted until December 31st, but farmers must agree to sell their entire crop by the end of the following year. Any GMO soybeans found after that deadline must be destroyed. Some industry experts say this could signal Brazil's growing acceptance of genetically modified organisms. That would give countries resistant to buying GMO crops would have little choice.

Seth Naeve's a soybean extension agronomist at the University of Minnesota.

"Once Europe acknowledges that these seeds coming from Brazil are in fact Round Up Ready or GMO produced seeds or grain that they will have to offer an equitable price for U.S. soybeans because they cannot or will not discriminate beans based on that issue," says Naeve.

But Naeve says resolving the GMO dispute won't be a cure-all for U.S. farmers. That's because Brazilian cultivators can still produce the crop more cheaply than their American counterparts. As result, Brazil can sell its crop for less.

"We are going to continue to lose foreign markets to Brazil," predicts Naeve. "I think we have to accept that so we have to continue to have domestic markets, whether that's animal agriculture or renewable fuels like bio-diesel -- those are all good uses for soybeans and we have to look at other crops as well."

Some Brazilians are concerned there may be a downside to their country's rapid soybean expansion.

Bert Bouwman grew up on a soybean plantation in Brazil. Most of his family continues to farm there.

Recently, he's watched his relatives grow rich off of high soybean prices. But he says a soybean glut will cause the market to crash. Sitting in his kitchen, he says subsidies will help American farmers weather the storm -- Brazilians won't be as lucky.

"They do not have Uncle Sam. And when they bring so many acres into production it might be good for a year or two, but they will not be able to stand on their feet if soybean prices dip below $3," cautions Bouwman.

That happened three years ago. Bouwman says until the price tumbles again he expects Brazil will continue its rise.